Business And Ethics

From MasterOfBusinessAdministration:

MBAs do not teach you about ethics and values. For example, business ethics classes in the USA and Canada teach that a businessman's ethical responsibility is to 1) the shareholder, 2) the creditor, 3) the employees, in that specific order.

The problem is that this is a complete inversion of ethics, placing the interests of money before the interests of human beings. So business "ethics" are unethical and if MBAs are at all effective in teaching them (which the notorious cheating in those departments makes unlikely) then they only serve to corrupt people.

In contrast, a degree in something other than business (eg, in maths) is highly likely to teach the student values and ethics. Not because it will be in any class but because the student will be surrounded by people with integrity and principle, so will learn values and ethics as a practical matter.

Economics is a similar matter, though I have no wish to go into it. -- RichardKulisz

order of ethical responsibility

Mine didn't (not a USA one, though). If an MBA course is that simplistic, time to find another provider, I think.

I'd agree that Business studies does attract the "greed is good" types, but my experience (having done both) is that there's a fair mix of all types. My MBA might have been a bit different, though, because it had a lot of public-sector (health, local government etc) and ex-military people there. -- PH

The priority order of ethics is pretty simple. It's 1) your employees, 2) your customers, 3) your creditors, 4) your shareholders (I forgot customers above).

And the public more generally? One of the more interesting bits was the discussion of situations like bribery for contracts, putting hotels on top of rural farmers etc. Answered below.

If you took a business ethics course which didn't teach that then it was avoiding ethics. Btw, US law requires businessmen

All managers, or directors only? (I don't know) I think it's only directors that are beholden to shareholders by law. Managers are beholden to superiors by economic fact and the absence of any employment protection laws.

to follow inverted ethics (eg, the proceeds of bankruptcy go to the creditors first and employees last, while the shareholders are indemnified). One of the consequences of that law is that if you go bankrupt, then you are required to sell off your customer database to the highest bidder and your customers, whom you told about your great "privacy policy", can go fuck themselves. So it is illegal under US law to be an ethical businessman.

There's actually a small study showing that people who take microeconomics courses become more selfish and greedy.

This is very easy to explain in terms of such courses' contents. In a typical microeconomics course, the teacher "explains" the PrisonersDilemna? and draws as an "objective" conclusion that defection is inevitable. Someone might reasonably say that the PrisonersDilemna? proves you need laws to prevent or minimize defection but this is considered socialist or communist thinking and not "objective" (ie, neoliberal) economics. The study used a class of students taught by a Marxist Chinese economist as a control group.

In fact, the word 'economics' in North America has become by definition neoliberal economics since everything left-wing gets dismissed as "political". So what happens is that students of economics become slightly more right-wing throughout their academic careers, in direct opposition to the slight left-wing trend among academic students in general.

Fortunately, I don't think this is true for the UK. Left-wing economics certainly exists... (if you're interested, check out http://www.parecon.org)

Damn, and I did say I didn't want to get into economics. Now you know why; it's inseparable from politics. -- rk

I disagree with this. I have been taught that economics is the study of choice. Ceteris paribus -- all other things being equal -- this is a legitimate field of human endeavour.
Note "the study of choice" is an aspect of political theory too, a big one. Or you might have remembered that the original name of the field was political economy. There's no room for disagreement here. -- rk Yes I agree with the tone set out in DeleteInsults, and BTW, this WikiNobody? thinks everything started with philosophy, then religion.... (or GameTheory -- MakeaSoftScienceHard?)

And the public more generally? One of the more interesting bits was the discussion of situations like bribery for contracts, putting hotels on top of rural farmers etc.

Ethics is the set of rules that govern members of a group's behaviour towards non-members. It's clearest outside of business. For example, if even one doctor does something shady to a patient, it harms the reputation of all doctors, and that matters because patient trust in doctors is critical to doctors.

So in the case of business, you have to ask whose good graces business most relies on. It's not shareholders because capital investment is easy to find. Plus, in a socialist economy, there aren't shareholders as such so you wouldn't need to worry about them at all. Workers are different and you can get into lots of arguments and counter-arguments. But the public is clear. You cannot do away with the public. And since business exists at the sufferance of the public, pissing off the public is completely unethical for a businessman.

(There are subtleties in the argument. Like do you consider the government and the mafia to be actors. Do you consider your ability to demoralize and control the working class as a factor. Do you consider government's ability to coerce and brainwash the public to be a factor? I believe the answer to be no to all of them on both moral and psychohistorical grounds. On pure ethical reasoning it gets pretty complicated.) -- rk

Ethics is the set of rules that govern members of a group's behaviour towards non-members.

Ahh, I see where you and I differ. I usually use the greatest inclusive scope (we're all in this together), you (at least here) use the smallest inclusive scope (it's us and them).

I notice you do include the feedback loop of "enlightened self interest" (anything that reflects badly on my group hurts me).

I guess I would have to stipulate scope to handle tightly confined situations (legal ethics, medical ethics, academic ethics, business ethics) although my normal inclination is the wider scope.

Paradoxically in my own life I tend to bias strongly toward the "innermost rings" (my self, my family), a basic assumption being that I can't help the "outer rings" (groups I belong to i.e. company/city/state/nation, humanity as a whole, life as a whole, etc.) if I'm not in the game at all. Admittedly that's a conceit.

I also get the nuances of "our company against their company" but also the context of "don't mess things up for our industry" in the process.

Of course my insistence on the broader scope of ethics tends to create personal dissonance where the industry I work in actually is bad for society but it feeds my family.

I suppose a pretty stark contrast could be seen where my industry is racketeering (assassination, extortion, power brokering, drug running, etc.) but still it feeds my family.

The more one's career is at odds with the greater good (yeah, I know, just let it be) the more necessary it becomes to partition ethics.

-- gh

What you call the greatest inclusive scope is morals, and morals are different from ethics, having a completely different philosophical basis and theory behind them. Also, the scope of a morality is not necessarily "greater" or "lesser" than the scope of an ethical system. The morality of a member of a small group towards other members of the same group is lesser in scope than the ethics of a bigger group's members. For example, the morality of a union member is smaller in scope than the ethics of a company employee.

If you want a simple label for it, you might call it "inclusive" versus "exclusive". But what it's really all about is that morality dictates your actions within a group and ethics your actions outside of a group. And they can conflict with each other if 'outside of group A' is 'within group B'. So there's not only conflict between different levels of the hierarchy of ethical systems, or between different systems at the same level of the hierarchy, but also between the ethical hierarchy and the moral hierarchy.

Finally, moralities tend to be more powerful and imperative the more inclusive they are, whereas ethics are more compelling the more exclusive they are. Human rights (universal morality) trumps tribal morality, and personal ethics trumps corporate ethics. -- rk

You can teach principles until you are red in the face, but as long as unethical behavior is rewarded, it will continue. Carrots and sticks dictate human behavior far more than lectures and nagging about "good behavior". In my observation, well-planned dishonesty does pay. Thus, it may be better to focus on the carrots and sticks instead of lecturing if you want to stop it. -t

Ethics are most emphatically not morality and never can be. Ethics often requires and demands immoral or amoral conduct and generally constraint the individuals right and responsibility to act as their own personal Moral compass would direct.

Examples :

Lawyer who undertakes a criminal defense is required to provide a vigorous defense regardless of his/her opinion of the defendants guilt. All communication is likewise privileged as even if the lawyer resigns from the case and any evidence gleamed from the communication can not then be used by the prosecutor, nor can its production be compelled by the prosecutor. Similar rules of privilege apply in civil cases.
A physician can not decide not to treat the injury or illness of an individual merely because he feels others are more deserving. Only medical criterion can be used to offer or withhold treatment. A rapist who is shot by the police must be treated, and if the injury is of higher gravity under triage rules, then in the case of limited resources they must be treated before their victim is.
The Police officer, who did the shooting referred to above, is not at liberty to, having disabled and arrested the alleged rapist, lean in and place one behind the ear.

It is the mark of the mature and thoughtful mind to acknowledge that the world in which we live is a rather more nuanced place than the world of ones and zeros in which we play. You may well think that 'MBA ethics' are not taught and to the extent that they are are insufficient. But the simplistic and naive understanding of ethics presented here is not a viable replacement.

If you want to learn about ethics and morality you may wish to consult some portion of the 2 000 year philosophical tradition in your quest for enlightenment. If nothing else you may come to realize that if it really were simple it might not have taken 2 000 years. You may also consider that ethics is morality within systems. We restrict the role of individual moralizing in favor of group ethical rules to achieve, we hope a more moral outcome in the aggregate, if each individual preforms his specific role, often in opposition to other roles..

If there were no prosecutors then we would not need defense attorneys. If we did not believe in due process we could let the police fire at will. This is why the system is a delicate tapestry whose strength does not derive from any individual thread. This is why a single unjust or immoral result does make the system non-viable.'

I urge you to study the subject upon which you wish to opine.

-- MarcGrundfest

CategoryEthics